Oil prices are stable ahead of Reuters’ OPEC + exit policy meeting

By Sonali Paul

MELBOURNE (Reuters) – Oil prices were flat on Tuesday ahead of a meeting expected by major producers to maintain plans to increase supply in February, as the rise in COVID-19 cases has not yet sparked a blockade in major fuel-consuming countries.

futures gained 1 cent at $ 78.99 a barrel at 0239 GMT, and US West Texas Intermediate (WTI) gross futures fell 2 cents to $ 76.06 a barrel.

Both benchmark contracts both rose more than 1% on Monday.

The Organization of the Petroleum Exporting Countries (OPEC), Russia and its allies – jointly known as OPEC + – will meet on Tuesday. The Joint Ministerial Monitoring Committee will meet at 12:00 GMT, followed by 13:00 GMT, both by video conference.

Three OPEC + sources have told Reuters that the group is likely to continue its plan to increase production to 400,000 barrels per day in February, as it has done every month since August.

Analysts at RBC Capital Markets said OPEC + would be unlikely to change current price forecasts, given pressure from US President Joe Biden to increase supply and a significant reduction in COVID-19 mobility.

“While Omicron (COVID-19 variant) cases continue to rise in key geographies, the lack of widespread blockade restrictions is likely to keep control of short-term demand concerns under control,” RBC analysts said in a statement.

However, they said that OPEC + should change its stance if tensions between the West and Russia escalate over Ukraine and fuel supplies, or if Iran’s nuclear talks with major powers continue, leading to an end to oil sanctions on Iran.

“We believe these two events are important wildcards that can quickly change the price trajectory and test OPEC’s rapid response mechanism,” RBC analysts said.